The four factors driving the retrofit revolution
Why buy when you can renovate? That's become one of the most important questions in industry. Rather than build greenfield sites, paper manufacturers like Verso and Fortress, for instance, are retrofitting paper mills from the 1960's and turning them into specialized production facilities. Antiquated machines are getting solid state drives and nodules grafted to their side, taking old school production into the future.
But what's driving it? We recently analyzed some of the major factors in an article on RT Insights.
First and foremost, revenue. Increasing production without having to make massive capital investments into new machinery can be hugely impactful on manufacturers' bottom lines, as demonstrated by ArcelorMittal. In early 2008, ArcelorMittal, a multinational steel manufacturing corporation, found itself stuck between a rock and a hard place financially when looking to upgrade a 1940's era iron ore complex in Nova Scotia.
With mounting budget pressure, the firm had to figure out a solution that would allow them to increase production from 16 million tons to 26-30 million. Instead of expanding its port, the company synchronized mining, grinding, and logistics activities to squeeze more production out of their existing facility. By 2015, the Mines Canada facility was producing 10 million additional tons a year while avoiding millions in capital.
Second, Moore's Law. No, it's not dead.
And for the rest, read the full article on RT Insights here.